Virtual power plant debuts in Italy’s balancing market

German virtual power plant operator Next Kraftwerke has provided balancing energy in Italy for the first time this month.

The Cologne-headquartered company’s virtual power plant
offered the transmission grid operator Terna 4.6 MW of flexibility to regulate
the consumption of a concrete plant.

Currently in Italy it is mainly large power plants that provide
balancing energy. In order to incentivize new players to participate on the
ancillary services market, Terna has launched a pilot project to test new ways
of providing a balancing mechanism, including through aggregating smaller
assets.

Called Progetto Pilota Per Unità Virtuali Abilitate Miste
– or UVAM for short – it defines the framework for virtual power plants in
Italy for the first time and as part of this project, Next Kraftwerke took part
in the first auction.

Terna tenders control reserve in annual, quarterly and
monthly auctions. There are two market zones in Italy for which prequalified
providers can bid and within those market zones, there are 15 aggregation
zones.

In those aggregation zones, it is permitted to aggregate
different plants in order to achieve the required minimum size for the
provision of balancing energy of one megawatt. Next Kraftwerke provided
flexibility throughout November from Monday to Friday in the market zone A
(North, Central-North) and aggregation zone 5 in the time slice 14-20 hours.

Since 2017, Next Kraftwerke and its Italian subsidiary
Centrali Next has been active on the Italian market as a power trader. “We
are delighted to be one of the first virtual power plants to have taken this
important step in the Italian market,” said Filippo Cantelmi, Business
Developer at Centrali Next.

He added that the UVAM pilot project „is a very nice
opportunity to generate additional revenue for cogeneration plants and large energy
consumers”.